96 per cent of small British manufacturers have said they are experiencing difficulties as a result of rising supply chain prices with more than half saying the issue is major, according to a survey conducted by Business support groups South West Manufacturing Advisory Service (SWMAS) and Manufacturing Growth Programme.
Growth opportunities are also being affected as supply chain issues are affecting margins with half of the manufacturing firms saying that recruitment and transport problems were hindering growth. The proportion of small manufacturers expecting profits to rise in the next six months fell to 46 per cent from 52 per cent at the start of 2021.
“It appears we are seeing the first signs of supply chain struggles hindering the upturn,” Nick Golding, managing director of SWMAS, said. “The challenges highlighted have been caused in part by government policies as a direct result of Brexit and the COVID-19 pandemic.”
Although the report said that core trends for manufacturing appear to have stabilised, it also said that SME manufacturers are under pressure from customers to maintain supplies and costs, while their own suppliers were increasing their prices.
The report concludes that support is required to ensure the long-term stability of the £190 billion SME manufacturing sector, this includes guidance around logistics and paperwork, helping businesses deal with supply chain price changes, and help with recruitment.
